The secret monopoly behind America's outrageous drug prices

Ever heard of "pharmacy benefit managers?"

The hidden force behind skyrocketing drug prices.
(Image credit: Ikon Images / Alamy Stock Photo)

Most people agree that American drug prices are too high — and it seems to be getting worse. Every month or so there comes yet another story about some holder of a pharmaceutical patent jacking the price up a zillion percent to make a quick buck at the expense of sick people. Martin Shkreli, the hedge fund "pharma bro" who has since been charged with securities fraud, made himself the villainous face of price-gouging doing just that — though Mylan Pharmaceuticals, which pulled the same routine with a device originally developed for the U.S. military, may be an even more stark example.

Yet there is another side to the story, a quintessentially American part of the pharmaceutical supply system that goes largely unnoticed. It involves something called "pharmacy benefit managers," or PBMs, as David Dayen explains in a blockbuster article for the American Prospect. These middleman companies are a major part of why American drug prices are so wildly out of line with the rest of the world.

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Ryan Cooper

Ryan Cooper is a national correspondent at TheWeek.com. His work has appeared in the Washington Monthly, The New Republic, and the Washington Post.